June 17, 2024

Average True Range (ATR)

Average True Range (ATR) is a technical indicator used to measure the volatility of a security‚Äôs price. It is a tool used by traders to measure fluctuations in security prices over a given period of time, and can help traders anticipate future market movements. Specifically, ATR measures the distance between the daily high and low prices of a security, and is calculated by taking the average of the true range values of a security over a specified period. Therefore, it is one of the most comprehensive and reliable indicators to measure the volatility of a security’s price movement. ATR also helps traders determine the potential stop-loss level on a position, thereby managing risk more effectively.

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